a. Differentiate between a department with line responsibility and a department with staff responsibility.b. In an organization that has a Sales Department and a Personnel Department, among others, which of the two departments has (1) lineresponsibility and (2) staff responsibility?
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a. Differentiate between a department with line responsibility and a department with staff responsibility.
b. In an organization that has a Sales Department and a Personnel Department, among others, which of the two departments has (1) line
responsibility and (2) staff responsibility?
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- 1.Which points revealed by the statement segmented by sales territory should be brought to the attention of management?2.Which point revealed by the statement segmented by product lines should be brought to the attention of management?Which of the following statements about responsibility accounting are correct? Select one: a. Responsibility accounting systems differ widely across organizations. b. The structure for accumulating cost information generally mirrors the structure for accumulating responsibility center information. c. Responsibility accounting is the primary responsibility of accounting staff.Which one of the following is not an example of a support department? Select one: a. Human resources b. Fabricating c. Information technology d. General factory
- Which of the following element is part of the controlling function? O a. Coordinating the functions of all departments. O b. Taking corrective measures to bring actual performance closer to standards. O C. Formulating and implementing suitable personnel policies in the organization. O d. Delegation of authority to the respective departments.For each of the following situations, two scenarios are described, labeled A and B. Choose which scenario is descriptive of a setting corresponding to activity-based responsibility accounting and which is descriptive of financial-based responsibility accounting. Provide a brief commentary on the differences between the two systems for each situation, addressing the possible advantages of the activity-based view over the financial-based view. Situation 1 A: The purchasing manager, receiving manager, and accounts payable manager are given joint responsibility for procurement. The charges given to the group of managers are to reduce costs of acquiring materials, decrease the time required to obtain materials from outside suppliers, and reduce the number of purchasing mistakes (e.g., wrong type of materials or the wrong quantities ordered). B: The plant manager commended the manager of the Grinding Department for increasing his departments machine utilization ratesand doing so without exceeding the departments budget. The plant manager then asked other department managers to make an effort to obtain similar efficiency improvements. Situation 2 A: Delivery mistakes had been reduced by 70 percent, saving over 40,000 per year. Furthermore, delivery time to customers had been cut by two days. According to company policy, the team responsible for the savings was given a bonus equal to 25 percent of the savings attributable to improving delivery quality. Company policy also provided a salary increase of 1 percent for every day saved in delivery time. B: Bill Johnson, manager of the Product Development Department, was pleased with his departments performance on the last quarters projects. They had managed to complete all projects under budget, virtually assuring Bill of a fat bonus, just in time to help with this years Christmas purchases. Situation 3 A: Harvey, dont worry about the fact that your department is producing at only 70 percent capacity. Increasing your output would simply pile up inventory in front of the next production department. That would be costly for the organization as a whole. Sometimes, one department must reduce its performance so that the performance of the entire organization can improve. B: Susan, I am concerned about the fact that your departments performance measures have really dropped over the past quarter. Labor usage variances are unfavorable, and I also see that your machine utilization rates are down. Now, I know you are not a bottleneck department, but I get a lot of flack when my managers efficiency ratings drop. Situation 4 A: Colby was muttering to himself. He had just received last quarters budgetary performance report. Once again, he had managed to spend more than budgeted for both materials and labor. The real question now was how to improve his performance for the next quarter. B: Great! Cycle time had been reduced and, at the same time, the number of defective products had been cut by 35 percent. Cutting the number of defects reduced production costs by more than planned. Trends were favorable for all three performance measures. Situation 5 A: Cambry was furious. An across-the-board budget cut! How can they expect me to provide the computer services required on less money? Management is convinced that costs are out of control, but I would like to know whereat least in my department! B: After a careful study of the Accounts Payable Department, it was discovered that 80 percent of an accounts payable clerks time was spent resolving discrepancies between the purchase order, receiving document, and the suppliers invoice. Other activities such as recording and preparing checks consumed only 20 percent of a clerks time. A redesign of the procurement process eliminated virtually all discrepancies and produced significant cost savings. Situation 6 A: Five years ago, the management of Breeann Products commissioned an outside engineering consulting firm to conduct a time-and-motion study so that labor efficiency standards could be developed and used in production. These labor efficiency standards are still in use today and are viewed by management as an important indicator of productive efficiency. B: Janet was quite satisfied with this quarters labor performance. When compared with the same quarter of last year, labor productivity had increased by 23 percent. Most of the increase was due to a new assembly approach suggested by production line workers. She was also pleased to see that materials productivity had increased. The increase in materials productivity was attributed to reducing scrap because of improved quality. Situation 7 A: The system converts materials into products, not people at work stations. Therefore, process efficiency is more important than labor efficiencybut we also must pay particular attention to those who use the products we produce, whether inside or outside the firm. B: I was quite happy to see a revenue increase of 15 percent over last year, especially when the budget called for a 10 percent increase. However, after reading the recent copy of our trade journal, I now wonder whether we are doing so well. I found out that the market expanded by 30 percent, and our leading competitor increased its sales by 40 percent.(Appendix 4B) Describe the difference between producing and support departments.
- An effective managerial accounting system should track information about an organizations activities in which of the following areas? a. Development b. Marketing c. Production d. Design e. All of these.A responsibility center in which the department manager has responsibility for and authority over costs and revenues is called a(n) _____ center. a.investment b.cost c.profit d.volumeFor each of the following, select its best description. A. Provides information used to evaluate the performance of a department. B. Performs an organization's main functions, like manufacturing and selling. C. Costs incurred for the joint benefit of more than one department. D. Holds manager responsible for revenues, costs and major investing decisions. E. Costs that can be readily traced to a department. F. Costs not within a manager's control or influence. 1. Investment center 2. Responsibility accounting system 3. Uncontrollable costs |4. Operating department 5. Direct expenses 6. Indirect expenses
- True or false: • Line personnel give assistance to staff employees. • Organizational structure is where authority and responsibility are distributed.Which of the following activities would use number of customer orders as an activity base? A. Order shipping B. Invoicing & collecting C. Customer return processing D. Both A & BUse the flowchart to answer these questions:a. What accounting document is represented by symbol A?b. What is an appropriate name for the department labeled B?c. What would be an appropriate description for process C?d. What is the location represented by symbol D?e. What accounting record is represented by symbol E?f. What is an appropriate name for the department labeled H?g. What device is represented by symbol F?h. What device is represented by symbol G?i. What accounting record is represented by symbol G?
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